Supreme Court Ruling Re-Draws Patent Venue Map

  • Aug 28 2017
  • |
  • Category: Blog

What is the proper venue to bring a patent infringement lawsuit?

The Supreme Court’s highly anticipated ruling in TC Heartland LLC. V. Kraft Foods Group Brands LLC has effectively reversed decades of patent venue law. At issue was whether patent litigation cases should be governed by the patent venue statute or the general venue statute.

The patent venue statute limits jurisdiction to venues in which a defendant resides, has committed infringement, or has a regular and established place of business. The general venue statute, on the other hand, permits a lawsuit to be brought in a venue in which there is personal jurisdiction.

The Backdrop

TC Heartland, an Indiana corporation headquartered in Indiana that manufactures flavored drink mixes, had been accused of infringement by a key competitor in this market, Kraft Foods – a Delaware corporation with its principal place of business in Illinois. Kraft sued TC Heartland for patent infringement in the District of Delaware. TC Heartland only shipped allegedly infringing products to Delaware, however, and was not registered to conduct business in the state nor did it have a presence there.

The Supreme Court agreed to hear the case after the U.S. Court of Appeals for the Federal Circuit rejected TC Heartland’s request for a change in venue. The appellate court cited a Federal Circuit Court ruling in 1990, which resolved questions of venue by finding the general venue statute applied. Because of that precedent, patent infringement plaintiffs have filed lawsuits against companies with nationwide distribution networks in almost any jurisdiction in the United States. This led to what many observers called abusive forum shopping and a proliferation of litigation in a small number of district courts, particularly in the Eastern District of Texas.

In a unanimous decision, the Supreme Court reversed the appellate court decision and ruled in favor of TC Heartland. In a decision authored by Justice Thomas, the high court said that Kraft should not be allowed to sue TC Heartland in Delaware, and that patent suits should be filed in the state in which the defendant is incorporated.

The Takeaway

This ruling will preclude patent owners from bringing cases in patent friendly jurisdictions like the Easter District of Texas, even though that court was not the focus of this case. In other words, the decision will rein in the longstanding practice of patent forum shopping. As TC Heartland significantly alters the patent litigation landscape, additional legislation addressing other issues in the patent litigation system is expected.

In the meantime, if you need assistance enforcing your patent rights or defending yourself from an infringement action, you are well advised to seek the advice and counsel of experienced intellectual property attorneys.